Panama Essay ⋆ Business Essay Examples ⋆ EssayEmpire

This Central American country was occupied by the Spanish from the 1510s and gained its independence as part of Gran Colombia in 1821, becoming an independent republic in 1903. The move to independence centered on Panama’s position, which eventually led to the building of the Panama Canal.

Under the Spanish, Panama was ruled initially by a violent conquistador, Pedro Arias de Avila. Panama City was established in 1519 on the Pacific Ocean. Because all goods from Europe going to South America had to be routed through Peru, and because many traders did not want to go past Cape Horn, goods were unloaded in Panama at the port of Colon in the Caribbean and then taken by land to Panama City. Trade to Europe also went through Panama, with much gold from Peru transported in Panama. Consequently, the Welsh pirate and buccaneer Sir Henry Morgan arrived from the Caribbean, sailing up the Chagres River and then going by land to attack and sack Panama City in 1671. In 1739, in the War of Jenkins’ Ear, British admiral Edward Vernon also attacked Panama. As a result of this newfound vulnerability, it was regarded as safer to send goods via Cape Horn.

In 1821 Gran Colombia, of which modern-day Panama was the northern part, became independent. The economy of the region was transformed in 1849 by the California gold rush; many people sought to go from Europe to the West Coast of America by crossing Panama. This traffic led to the building of the Trans Panama Railway, which rapidly became, mile for mile, the most expensive railway in the world for passengers, with the overwhelming majority of passengers and goods going from the east coast to the west coast.

In 1883, following the French success with the Suez Canal, Ferdinand de Lesseps drew up plans to build the Panama Canal. Despite raising large amounts of money from investors and speculators, he ran into many problems; parts of the building work were delayed, and the plan collapsed. It was left to George Washington Goethals (1858–1928) to use U.S. funds to build the canal, which finally opened in 1914. During both the French and the U.S. construction work, many migrant laborers were brought to Panama from Barbados, Trinidad, and other parts of the Caribbean. The canal became U.S. territory (and remained such until 1979), and the United States purchased the Danish West Indies from Denmark in 1917 to help control and supply the canal.

When the United States started its interest in the Panama Canal, independence movements arose, with the elite in Panama City agitating for full independence. A civil war in Colombia in 1903 provided the opportunity for a revolutionary junta to declare independence on November 3, 1903. Under the 1903 Panama Canal treaty, the United States was able to maintain its rights; initially, it had “sovereign rights in perpetuity over the Canal Zone.” But after several interventions, in 1936 the United States revoked its right to intervene militarily, and in 1955 it signed a new treaty providing a higher payment to the Panamanian government for continued use of the canal.

After a 1968 coup d’état, a military dictatorship under Gen. Omar Torrijos (1929–81) was established in Panama, leading to a renegotiation of the canal treaty. In 1979 Torrijos and U.S. president Jimmy Carter signed a new treaty that phased out all U.S. ownership and control by 1999. In return, the Panamanians, in another treaty, undertook that the canal would remain open and neutral during times of peace and war.

A U.S. government dispute with Panamanian general Manuel Noriega led to the U.S. invasion of Panama in December 1989, after more than a year of economic sanctions. The U.S. government claimed that the country was being heavily used by drug syndicates, and the invasion led to the deaths of some 1,000 people. The U.S.-installed Endara government rapidly collapsed. In 1999, however, the United States relinquished control of the Panama Canal.

During some periods of its history, Panama has used the U.S. dollar, and its currency, the balboa (named after the Spanish explorer who was the first European to see the Pacific Ocean), is heavily tied to the U.S. dollar.

Panama’s main exports are bananas (heavily controlled in the past by United Fruit Co.), shrimp, sugar, coffee, and clothing—the Panama hat becoming famous around the world. Imports include capital items, oil, food, and consumer goods. Some 20 percent of exports go to the United States, and Japan provides 37 percent of the country’s imports.

Bibliography:

Miles P. Du Val, And the Mountains Will Move: The Story of the Building of the Panama Canal (Greenwood Press, 1968);
Peter Earle, The Sack of Panamá: Captain Morgan and the Battle for the Caribbean (Thomas Dunne Books/St. Martin’s Press, 2007);
Luis I. Fitzgerald, Historia de las relaciones entre Panamá y los Estados Unidos [History of the Relations Between Panama and the United States] (Editorial Universitaria [EUPAN], 2007);
George Fry and Associates, Industry in Panama: Survey and Action Report (International Cooperation Administration, 1961);
Julie Greene, The Canal Builders: Making America’s Empire at the Panama Canal (Penguin Press, 2009);
F. Hornbeck, The Proposed U.S.-Panama Free Trade Agreement (Congressional Information Service, Library of Congress, 2007);
Charles D. Kepner, The Banana Empire: A Case Study of Economic Imperialism (Vanguard Press, 1935);
Gerstle Mack, The Land Divided: A History of the Panama Canal and Other Isthmian Canal Projects (Octagon Books, 1974);
Aims McGuinness, Path of Empire: Panama and the California Gold Rush (Cornell University Press, 2008);
Peter Michael Sánchez, Panama Lost? U.S. Hegemony, Democracy, and the Canal (University Press of Florida, 2007).

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